Building a Better Theory of Well-Being

By Richard A. Easterlin. Social Science Research Network, 2003

377 citations recorded by the source corpus.

What do social surveys of life cycle experience tell us about the determinants of subjective well-being? First, that the psychologists’ setpoint model is wrong. Life events in the nonpecuniary domain, such as marriage, divorce, and physical disability, have a lasting effect on well-being, and do not simply deflect the average person temporarily above or below a setpoint given by genetics and personality. Second, mainstream economists’ inference that in the pecuniary domain “more is better,” based on revealed preference theory, is wrong. An increase in income, and thus in the goods at one’s disposal, does not bring with it a lasting increase in well-being, because of the negative effect on utility of hedonic adaptation and social comparison. The utility anticipated ex ante from an increase in consumption turns out ex post to be less than expected, as one adapts to the new level of living, and as the living levels of others improve correspondingly. A better theory of well-being builds on the evidence that adaptation and social comparison affect utility more in pecuniary than nonpecuniary domains. The failure of individuals to anticipate that these influences disproportionately undermine utility in the pecuniary domain leads to an excessive allocation of time to pecuniary goals at the expense of nonpecuniary goals, such as family life and health, and reduces well-being. There is need to devise policies that will yield better-informed individual preferences, and thereby increase individual and societal subjective well-being.

Subfields: General Health Professions, Social Psychology, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/67c18bc1fe8ed310ffcdb9d949aaa0a51d830b7b

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In General Health Professions

In Social Psychology

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Citations in the corpus

Would You Be Happier If You Were Richer? A Focusing Illusion (2006, background): “Easterlin (1), for example, found that the fivefold increase in real income in Japan between 1958 and 1987 did not coincide with an increase in the average self-reported happiness level there.”
Governance, entrepreneurship and economic growth (2012, background): “On happiness and economy, see e. g. Frey and Stutzer 2002; Easterlin 2005).”
The Set Point Theory of Well-Being Has Serious Flaws: On the Eve of a Scientific Revolution? (2010, background): “Easterlin (2005) appears to be the first to attack set-point theory head-on and claim that it is seriously in error.”
Deep and persistent disadvantage in Australia (2013, background): “There is a school of thought within psychology that each person has a ‘set point’ of happiness or life satisfaction largely determined by genetics and personality, which they generally return to after relatively brief deviations caused by most life events or changed circumstances (Easterlin 2003; He”
Happiness Economics from 35,000 Feet (2012, neutral): “In this paper, the terms ’happiness’ and ’wellbeing’ are used interchangeably (the weaknesses of this approach are considered in subsubsection 2.1.1, but it is widespread—see, for example, Ferrer-i-Carbonell, 2005; Ormerod & Johns, 2007; Rehdanz & Maddison, 2005; Easterlin, 2006).”
Life Goals Matter to Happiness: A Revision of Set-Point Theory (2008, background): “Easterlin (2005) cites a good deal of evidence to show that people more or less completely adapt to improvements in their economic circumstances, so that no satisfaction/utility gain accrues.”
National well-being and international sports events (2010, background): “11 This can be thought in terms of a set-point theory of happiness, where various aspects can create deviations from a predetermined level of happiness for a certain period of time (Easterlin, 2005).”
The Set-Point Theory of Well-Being: Negative Results and Consequent Revisions (2007, background): “However, discordant evidence is emerging and the theory has been questioned and partly revised in some recent papers (Easterlin 2005; Huppert 2005; Diener et al. 2006; Headey 2006).”
Authentic happiness theory supported by impact of religion on life satisfaction: A longitudinal analysis with data for Germany (2010, background): “So, on average, the community perceives itself as no better off (Easterlin, 1974, 2005).”
Happiness Adaptation to Income and to Status in an Individual Panel (2010, positive): “Easterlin (2003) argues that family aspirations do not change as marital status and family size change but that material aspirations increase commensurately with household wealth.”